Lex Inside – Exclusive distribution agreements

The Court of Justice of the European Union introduces, for the first time, the concept of a supplier’s parallel obligation in the context of exclusive distribution agreements.

From now on, when a supplier grants territorial exclusivity, it must protect the exclusive distributor against active sales by other resellers in this territory.
This obligation implies genuine contractual reciprocity: the supplier must inform resellers, obtain their agreement – whether explicit or tacit – and ensure that this protection is respected.

Failing this, the agreement may no longer benefit from the exemption provided by the block exemption regulation, exposing the parties to the risk of nullity.

This is a major development in competition law, prompting companies to review their distribution agreements and sales monitoring practices. Michel Ponsard, a partner at UGGC Avocats and President of the French Association for Competition Studies, discusses the implications of this decision in the Be Smart for Change program.